By: Peter Moore, CEO of Lolly
Last week head of Apple, Tim Cook addressed a crowded room full of students at Trinity College in Dublin and boldly claimed, “your kids will not know what money is.”
Of course he has a vested interest in the success of ApplePay and the eWallet market in general, but even with a seeming decline in the popularity of cash payments, I disagree with his statement. Sure, the payments market is constantly evolving and new technologies mean that the next generation will see even more changes to transactions and how money is used, but cash is not going anywhere anytime soon. Also driving another ecosystem with the small retailer café only surviving hard work and long hours through their ability to be unaccountable within cash.
First of all, to ignore cash is to ignore vast swathes of the population and the businesses that cater to them. For example, convenience stores and small, independent cafes and retailers still rely on cash as the cornerstone of their businesses. This is not because they don’t take alternative payments; more and more independent retailers are accepting – and profiting from – card, contactless and even eWallet payments thanks to affordable, integrated EPoS systems. No, it’s because cash is still king for the working classes that rely on these corner shops and cafes for their everyday needs. We should not ignore the large number of small businesses that rely on cash transactions to stay afloat.
Another ‘pro-cash’ argument the payments industry knows all too well is that of shrinking margins. Banks still want to make a profit and as they are already making less per transaction, it it only a matter of time before they start charging consumers a fee for card and even eWallet services. So even consumers who rarely use cash now will start to re-evaluate when it makes sense to pay with their phone and when they should simply pay with cash. At least until balance is restored.
Keeping cash as part of the equation doesn’t mean payments technology will go away or even stagnate, however. We’ve advanced way too far for that to happen. Direct to bank transactions and new eWallet technologies will evolve to incorporate on and off-line transactions, for example, keeping banks and consumers happy. But Mr. Cook should cool his jets a little – cash still has a role to play and isn’t going anywhere just yet!